Steve Cohen provides funds for hedge fund protégé Gabe Plotkin

Citadel and Point72 Asset Management have agreed to invest $2.75bn in the hedge fund Melvin Capital after its difficult start to the year, in a rare move that sees two industry titans help a smaller rival.

Ken Griffin’s Citadel will invest $2bn and Steve Cohen’s Point72 will add $750m, according to sources familiar with the transaction.

The infusion of capital comes as Melvin, which was founded by Gabe Plotkin, a protégé of Mr Cohen’s, suffered double-digit percentage investment losses in the first few weeks of January. 

“I’ve known Gabe Plotkin since 2006 and he is an exceptional investor and leader. We are pleased to have the opportunity to invest additional capital and take a non-controlling revenue share in Melvin Capital,” Mr Cohen said in a statement. 

Mr Griffin said: “Gabe Plotkin and team have delivered exceptional results over the history of Melvin. We have great confidence in Gabe and his team.” 

Melvin declined to comment. 

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